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<br />Section 2.03. Assignment of Leases.
<br />(a) As part of the consideration for the Secured Obligations, Grantor absolutely and
<br />unconditionally assigns and transfers to Beneficiary all of Grantor’s right, title and interest in, to and
<br />under the Leases, including Grantor’s right, power and authority to modify the terms of any such Lease,
<br />or extend or terminate any such Lease. It is the intention of Grantor to establish a present, absolute and
<br />irrevocable transfer and assignment to Beneficiary of all of Grantor’s right, title and interest in, to and
<br />under the Leases. Grantor and Beneficiary intend this assignment of the Leases to be immediately
<br />effective and to constitute an absolute present assignment and not an assignment for additional security
<br />only. For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose,
<br />the Leases shall not be deemed to be a part of the “Property,” as that term is defined in the granting
<br />clauses. However, if this present, absolute and unconditional assignment of the Leases is not enforceable
<br />by its terms under the laws of the State, then the Leases shall be included as a part of the Property and it is
<br />the intention of the Grantor that in this circumstance this Mortgage create and perfect a lien on the Leases
<br />in favor of Beneficiary, which lien shall be effective as of the date of this Instrument.
<br />(b) Until the occurrence of an Event of Default, Grantor shall have all rights, power
<br />and authority granted to Grantor under any Lease (except as otherwise limited by this Section or any other
<br />provision of this Mortgage), including the right, power and authority to modify the terms of any Lease or
<br />extend or terminate any Lease. Upon the occurrence of an Event of Default, the permission given to
<br />Grantor pursuant to the preceding sentence to exercise all rights, power and authority under Leases shall
<br />automatically terminate. Grantor shall comply with and observe Grantor’s obligations under all Leases,
<br />including Grantor’s obligations pertaining to the maintenance and disposition of tenant security deposits.
<br />(c) Grantor acknowledges and agrees that the exercise by Beneficiary, either directly
<br />or by a receiver, of any of the rights conferred under this Section 2.03 shall not be construed to make
<br />Beneficiary a mortgagee-in-possession of the Property so long as Beneficiary has not itself entered into
<br />actual possession of the Land and the Improvements. The acceptance by Beneficiary of the assignment of
<br />the Leases pursuant to Section 2.03(a) shall not at any time or in any event obligate Beneficiary to take
<br />any action under this Mortgage or to expend any money or to incur any expenses. Beneficiary shall not
<br />be liable in any way for any injury or damage to person or property sustained by any person or persons,
<br />firm or corporation in or about the Property. Prior to Beneficiary’s actual entry into and taking possession
<br />of the Property, Beneficiary shall not (i) be obligated to perform any of the terms, covenants and
<br />conditions contained in any Lease (or otherwise have any obligation with respect to any Lease); (ii) be
<br />obligated to appear in or defend any action or proceeding relating to the Lease or the Property; or (iii) be
<br />responsible for the operation, control, care, management or repair of the Property or any portion of the
<br />Property. The execution of this Mortgage by Grantor shall constitute conclusive evidence that all
<br />responsibility for the operation, control, care, management and repair of the Property is and shall be that
<br />of Grantor, prior to such actual entry and taking of possession.
<br />(d) From and after the occurrence of an Event of Default, and without the necessity
<br />of Beneficiary entering upon and taking and maintaining control of the Property directly, by a receiver, or
<br />by any other manner or proceeding permitted by the laws of the State, Beneficiary immediately shall have
<br />all rights, powers and authority granted to Grantor under any Lease, including the right, power and
<br />authority to modify the terms of any such Lease, or extend or terminate any such Lease.
<br />(e) Grantor shall, promptly upon Beneficiary’s request, deliver to Beneficiary an
<br />executed copy of each residential Lease then in effect. All Leases for residential dwell ing units shall be
<br />on forms approved by Beneficiary, shall be for initial terms of at least six months and not more than two
<br />years, and shall not include options to purchase. If customary in the applicable market, residential Leases
<br />with terms of less than six months may be permitted with Beneficiary’s prior written consent.
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